🤑OpenAI Funding Update

OpenAI secures $6.6 billion in historic funding round

Key Points 

• OpenAI has closed a $6.6 billion funding round, boosting its valuation to $157 billion.

• Thrive Capital led the funding round with a $1.3 billion investment and a special deal for next year.

• The funds raised will cover the high costs of training advanced "reasoning" AI models. 

• OpenAI must restructure as a for-profit company within two years, or the funding will convert to debt.

• The company is requesting that investors avoid backing competitors, including Anthropic, Elon Musk’s xAI, and its co-founder Ilya Sutskever's Safe Superintelligence.

♨️News - OpenAI just closed a massive funding round, raising $6.6 billion at a $157 billion valuation, all to keep pushing towards its goal of building artificial general intelligence. The valuation is about 40 times their reported revenue, which really shows how much hype there is around AI in Silicon Valley.

Thrive Capital led the round with a $1.3 billion investment and even got a special deal—something other investors didn’t get—to invest another $1 billion next year at the same valuation.

The billions raised will be used for the costly task of training advanced AI models. To put this into context, Anthropic CEO Dario Amodei recently said that AI models costing $1 billion to train are already in the works, and $100 billion models aren't far off. For OpenAI, which wants to build a series of "reasoning" models, these costs are only going to keep growing, making new funding rounds like this crucial.

The funds raised today, however, are apparently contingent on OpenAI restructuring as a for-profit company. Right now, the for-profit part is managed by a nonprofit, and investor profits are capped at 100x. If OpenAI doesn’t make this switch within two years, the funding will turn into debt.

👨🏻‍💻What's more? In a pretty unusual move, OpenAI has asked investors not to back rival startups like Anthropic and Elon Musk’s xAI, as well as its co-founder Ilya Sutskever's new company, Safe Superintelligence (SSI).

AI search startup Perplexity and enterprise search firm Glean were also mentioned in OpenAI's discussions with investors, indicating that OpenAI plans to sell more of its tools to businesses and end users as it  looks to boost revenue, aiming to grow from $3.7 billion this year to $11.6 billion by 2025.

While the request isn’t legally binding, it shows how OpenAI is using its influence to secure exclusive commitments from investors in a competitive landscape where access to capital is essential.